DAR ES SALAAM (Reuters) - Tanzania has lifted a ban on grain exports and will allow traders to sell surplus maize to the U.N.'s food agency and drought-hit east African countries following a bumper harvest, the government said in a statement on Wednesday.
East Africa's second-biggest economy has a surplus of 1.7 million tonnes of grain amid serious food shortages in the region, according to government estimates.
"President (Jakaya) Kikwete has said formal arrangements should be made so that traders can sell surplus food to neighbouring countries and even to the World Food Programme (WFP)," the Tanzanian president's office said in a statement.
Tanzania said in September it had agreed to sell 10,000 tonnes of maize to Kenya and would export more food to the neighbouring country in future.
Kikwete ordered officials to supervise regulated grain exports to ensure the country did not deplete its own food reserves.
Tanzania announced a food export ban in May after unregulated trade caused shortages that helped drive the rate of inflation to 14.1 percent in August.
The government blamed food shortages in some parts of the country and high prices in urban centers on distribution constraints.
The Tanzanian leader ordered the state-run National Food Reserve Agency (NFRA) to step up efforts of purchasing grain from farmers with surplus food and distributing it to areas with deficits.
"We have an obligation to suppress prices by supplying enough food to urban markets ... there is still a lot of food in the hands of our farmers," the statement said.
A ban on sugar exports announced last month remains in force despite the lifting of the grain export ban.